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Financial Focus

Pressure mounted on George Osbourne last night not to push through the radical banking reforms that will be recommended by Sir John Vickers next month. The ICB has already suggested that the retail arms of British banks should be ring fenced from their other activities. Angela Knight, head of the British Bankers Association, said that the plans could derail the recovery of the banks and threaten the health of the economy.

THE ITALIAN government back tracked on parts of its widely criticized austerity package yesterday, scrapping a tax on high earners and scaling back cuts to local authority funding. The government said ministers had reached unanimous decisions on the package which caused serious tension in the centre-right coalition.

SHARES in two of Greece’s major lenders soared yesterday after they announced plans for a full scale merger that will create the region’s biggest bank by assets. Alpha Bank and EFG Eurobank saw their stock leap 26% and 29% respectively, with their rivals’ share prices also rising as investors welcomed the prospect of consolidation in Greece’s shaky banking sector.

MARKETS:

ASIAN stocks climbed for a fourth day, set for their longest streak of daily advances since July, after U.S. consumer spending and car sales increased and as companies across the region reported higher profit. The MSCI Asia Pacific Index gained 1.3% as of 1:52pm in Tokyo, with almost four stocks rising for each that fell.

JAPANS Nikkei 225 Stock Average advanced 1.3%. The ruling Democratic Party of Japan yesterday chose Finance Minister Yoshihiko Noda to succeed Noato Kan as Prime Minister. Noda advocated an increase in levies to help finance disaster reconstruction, something opposed by his challengers in the leadership race.

FUTURES on the Standard and Poors Index lost 0.1% today. In New York the index rose 2.8% yesterday after the reports showing rising consumer spending and incomes overshadowed a drop in pending home sales, easing concern that the U.S. is slipping into a recession.

CURRENCIES:

THE YEN, dollar, and Swiss franc held onto declines against most of their peers as stocks extended a global rally before reports economists say will show Asia’s biggest emerging economies remain resilient.

ENERGY:

OIL rose for a fourth day in new York as investors bet that signs of a strengthening U.S. economy and the return of refinery operations after Hurricane Irene indicate fuel demand will increase.

COMMODITIES:

RICE may rally 22% by the end of the year as Thailand, the world’s largest exporter, buys the grain from farmers at above market rates, pushing up costs for importers and fanning global inflation even as economic growth slows.

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